Please log in to continue

Not a subscriber?

Raising minimum wage is a strong tool for economic revitalization: John Traynor

Getty Images/Blend Images

Posted
Tuesday, July 11, 2017 2:38 pm

John Traynor

Pennsylvania’s minimum wage is stuck in the past and that’s bad for business.

Set at $7.25 an hour since 2009, Pennsylvania’s minimum wage is lower than all six of our neighboring states.

Our state minimum wage, which amounts to just $15,080 a year for full-time work, is a drag on Pennsylvania’s customer base, tax base and economy.

I own the Harrisburg Midtown Arts Center, a multi-venue arts and entertainment complex, which includes The Kitchen & Gallery Bar, a 150-seat restaurant. We won the 2016 Tourism Business of the Year award from the Hershey Harrisburg Regional Visitors Bureau. Paying fair wages has been a big part of our success.

While Pennsylvania’s minimum wage has stagnated at $7.25 for eight years, at HMAC we’ve raised our starting pay because it’s vital for our employees and good for our business. Our starting pay is $12 for employees who don’t earn tips. Tipped staff earn an average $18 to $25 an hour with tips.

In the service industry, staff turnover is typically very high — as much as 100 percent a year or higher. This low pay, high churn business model is actually very costly — businesses are constantly training new staff and starting the process over again when someone leaves to make a little bit more someplace else. By contrast, we pay a fair wage and our turnover is very low, which saves us considerable money in hiring and training costs.

That’s not all. I know from experience that building a brand with loyal employees is the most important thing for customer satisfaction and long-term growth.

With lower turnover and more experienced staff, we have less waste in our kitchen, better products and stronger customer service. Satisfied customers are not only more likely to return themselves, they tell their friends and family, spurring new business.

Most businesses have more customers than employees. Raising the minimum wage boosts the consumer spending that allows businesses to grow and add jobs.

Minimum wage increases put needed money in the pockets of workers who are most likely to turn around and spend every extra dollar — benefiting businesses all around Pennsylvania.

When the minimum wage is too low for workers to make ends meet, it hurts businesses as well as workers.

One way or another, society pays for low wages. When companies pay employees so little they cannot afford the basics like rent, groceries and transportation, they are counting on taxpayers to subsidize their inadequate pay with public assistance. They are essentially shifting part of their labor bill to the state budget and private charity. That’s not fair or efficient.

Raising the minimum wage is smart budget policy. Gov. Tom Wolf’s proposal to increase Pennsylvania’s minimum wage to $12 per hour would boost state revenue by about $95 million annually.

Opponents of raising the minimum wage don’t speak for me or for most businesses. A 2016 survey of 1,000 business executives, conducted by a leading Republican pollster for the Council of State Chambers, found that 80 percent of respondents supported raising their state’s minimum wage. Only 8 percent opposed it.

We can debate how high to raise the minimum wage, but let’s not pretend that it makes sense to keep it at $7.25.

Legislation introduced in the General Assembly would raise the minimum wage to $15 by 2024. I think that makes good sense for workers, businesses and communities.

HMAC is one of the cornerstones of the redevelopment and revitalization of Midtown Harrisburg. We are listed on the National Register of Historic Buildings and were given a 2016 Historic Harrisburg Preservation Award by the Historic Harrisburg Association. Revitalization is not just about preserving our architectural heritage. It’s about creating good jobs with decent wages that allow people to better support themselves and grow our local tax base and economy.

Raising the minimum wage is one of the strongest tools we have in revitalizing our economy and building thriving communities.

John Traynor is the owner of the Harrisburg Midtown Arts Center and a member of Business for a Fair Minimum Wage.